American Apparel

Gloria Villarreal
MKT300
JUNE 1, 2015

Dov Charney
Former CEO
Dov Charney, Canadian Jew from Montreal, was
born in January 31, 1969
Attended Tufts University in Medford, MA 02155
Studied American Heritage
Freshman year he began to sell t-shirts out
of his dorm room
Adapted the American Apparel name
Partnered with a authorized Hanes wholesaler
Imported into Canada on an Amtrak train from
Grand Central NY to Montreal Canada at 1am
Sold Hanes shirts to dyers, cutting Canadian
Channel
This was until he began making his own shirts in
South Carolina,
1997

History
Designs and makes logo-free T-shirts, tanks, yoga pants,
and more for men, women,and children-- and does it
all from its California factory, rather than exporting
labor overseas.
Brands include Classic Girl, Standard American, Classic
Baby, and Sustainable Edition, among others.
American Apparel runs 250-plus retail stores in 20
countries.
In mid-2014, the board replaced controversial CEO Dov
Charney, who founded American Apparel in 1998.

Market segmentation: Geographic

located in life style streets, self standing, and
college towns
Target market that is young urbanites who
see themselves as unique instead of as part
of a generic, main-stream fashion culture.
Differ their merchandise mix per location,
Example: Tribeca vs Columbia, Tribeca: young
married couples with 1+ baby, this store has
baby section fully stocked

Market segmentation: demographics

Age: 20-35
Gender: male and female
Income: $25,000-$100,000
Focus on young adults, because they tend
to invest in fashion

Market segmentation:
psychographic
Rebellious and unbranded
Personality: young adults who see themselves as
unique individuals
Motives: as American Apparel is known for
Made in USA, the company targets customers
with motives that when they buy American
Apparels product, they not only buy hip clothing
but also support to create jobs in USA.
Lifestyles: young metropolitan adults
American Apparel has wide range of t-shirt lines
for young adults who dont dress up so much.

Positioning
American Apparel is known for seductive advertisements, positive
acts towards a sweatshop-free environment and the pro-labor
practices involving immigrants. American Apparel has also prided
itself on being an environmentally friendly company through the
use of organic cotton and recycled fabric scraps. American Apparel
positions themselves as a Made in the United States brand with
a great warehouse environment, but advertises their brand as a
sexual object.

Value Proposition
10,000 employees
Latest annual revenue: 2012 $617,310 (in thousands)
Reported a Net Loss in the past three years
Loan for $30mil was showing an interest rate of 15%
An average interest rate for businesses is 6-7%

$120million in debt

 In 2009 American Apparel opened 27 retail stores world

wide (mainly US) in order to bust their revenue
At the same time, 1500 illegal employees were
terminated, a third of the workforce who were paid the
lowest salary possible
The cost of hiring new staff, reversed the revenue to a loss.

Advertising and Promotion

Social Media Facebook, Twitter, Instagram, MySpace
Vice Magazines
Provocative Billboards
Transportation Buses
New website
New online magazine
New phone app

Consumer Behavior
In the beginning, American Apparel put a "sweatshop
free" label on its t-shirts. But sex turned out to be a
better sell than good labor practices.
consumers call themselves "environmentally conscious"
Price, quality, convenience and pleasure

Recommendations and
Improvements
Closing the gaps within the market
Promote an ethical stance
Bring Back to Basics campaign
Highlight on basic fashion pieces not the models
Highest quality basics that make fashion trendy, unique, and
versatile

Thank You!!
Gloria-V

Khloe
Kardashian
Megan

Barbie
Blank